6. GOODWILL

The value of goodwill is primarily derived from the acquisition of Rosetta Stone Ltd. (formerly known as Fairfield & Sons, Ltd.) in January 2006, the acquisition of certain assets of SGLC in November 2009, the acquisition of Livemocha in April 2013 and the acquisition of Lexia in August 2013. The Company tests goodwill for impairment annually on June 30 of each year at the reporting unit level using a fair value approach, in accordance with the provisions of ASC topic 350, Intangibles—Goodwill and Other (“ASC 350”) or more frequently, if impairment indicators arise. The Company’s annual testing resulted in no impairment of goodwill since the dates of acquisition. Beginning in the fourth quarter of 2012, the Company began reporting its results in three reportable segments, which also consisted of three reporting units for goodwill impairment purposes—North America Consumer, Rest of World (“ROW”) Consumer, and Global Enterprise and Education (previously referred to as Institutional).

The goodwill recorded from the Livemocha acquisition was allocated to the reportable segments that reflect the results of the legacy Livemocha operations. The goodwill recorded from the Lexia acquisition was allocated to the Global Enterprise and Education reportable segment. The following table represents the balance and changes in goodwill by reportable segment, for the nine months ended September 30, 2013 (in thousands):

					Global
	North America		Rest of World		Enterprise &
	Consumer		Consumer		Education			Total

Balance as of December 31, 2012	$	13,499	$	2,199	$	19,198		$	34,896
Acquisition of Livemocha	4,422		—		720			5,142
Acquisition of Lexia	—		—		9,938			9,938
Effect of change in foreign currency rate	—		—		(4		)	(4		)
Balance as of September 30, 2013	$	17,921	$	2,199	$	29,852		$	49,972